Similarly to the formation of other organs, skeletogenesis involves two broad classes of regulatory factors. Patterning factors control the shape, size and number of skeletal element, as well as initial decisions regarding the body plan of the embryo, whereas differentiation factors control the fate of the constituent cells of the skeleton. Previous cell biological experiments suggested that osteoblast differentiation occurs along a multistep pathway. More recently, the transcription factor Cbfa1/Runx2 was shown to be needed for osteoblast differentiation. Very recently, we have discovered that a novel member of the Kruppel family of transcription factors, called Osterix (Osx), is required for bone formation and osteoblast differentiation. Osx null mice have no membranous, and no endochondral bones, although chondrocyte differentiation and cartilage formation occur normally. Furthermore, our experiments indicate that Osx acts downstream of Cbfa1/Runx2. This application proposes to characterize the mechanisms by which Osx controls osteoblast differentiation. We plan to examine the extent of the osteoblast-genetic program that is controlled by Osx and identify sequences in target genes that directly mediate the transcriptional activation by Osx of these genes in osteoblasts in vivo. Our studies will also identify the proteins that either physically or functionally interact with Osx, or control its activity. Finally, we will determine whether Osx is a negative regulator of Sox9 expression and of the chondrocyte differentiation program. Overall, these experiments should greatly improve our understanding of the molecular mechanisms of osteoblast differentiation.